House agents and sellers, beware of ‘fake buyers’

In many “fake buying” instances, buyers know from the onset they don’t have the financial means to make a cash offer, but this doesn’t stop them from doing so.

We often see this in buyers who are reluctant to disclose where the money for the transaction is coming from. When it’s time for the money to be transferred to the attorneys, the “buyer” discloses that the money’s coming “from abroad”’.

This situation isn’t only extremely time and cost consuming, it’s fraudulent and puts everyone involved in the potential sale in an unfortunate position.

It causes a logistical and administrative nightmare, also for sellers who will regularly base the successful sale of their current property on the acquisition of their next property.

“Fake buyers” are willing to pay the full price and will frequently show interest in buying a second property at the same time.

Advice to sellers, agents and agencies:

• While it’s often said “cash is king”, this isn’t necessarily true here. A bondable transaction requires milestones to be achieved. With a cash transaction there are no guarantees until the day the money is due.
• Sellers must insist on a sizeable deposit payable within a short period.
• A seller can ask for proof of funds before accepting a cash offer.
• Don’t make any changes to the property as required by the purchaser until the transferring attorney confirms that everything is in order.
• Should the seller wish to proceed with the purchase of another property, ensure the transaction is linked to the successful conclusion of the sale of the first.
• Never give occupation to a buyer unless guarantees have been delivered.
• The seller has the right to appoint the transferring attorney who will then act on their client’s behalf.
• The parties can contractually agree to continue marketing the property until guarantees have been delivered.

Van der Linde is Seeff’s MD in Pretoria East

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